Nypro Inc. is beefing up its presence in Europe by buying part of slumping Finnish electronics molder CMS Industry Oy.
Clinton, Mass.-based Nypro said Oct. 1 it signed a letter of intent to buy 50 percent of CMS, in Salo, Finland, and to create a joint venture that will be managed by Nypro. Terms were not disclosed.
CMS has one injection molding factory with 43 presses and 100 employees. Its parent company, Ensto Group, makes electrical accessories. CMS officials could not be reached for comment, but financial documents on Ensto's Web site indicate that CMS' sales fell sharply recently.
Ensto, based in Porvoo, Finland, blamed a slowdown in the contract manufacturing business and fluctuating demand in the telecommunications sector.
The CMS unit recorded 6.7 million euros ($7.8 million) in sales for the first half of 2003, down 34 percent from 10.1 million euros ($11.8 million) in the same period in 2002. CMS consolidated molding operations last year and was able to maintain a profit of about 500,000 euros ($585,000) in the first half of 2003, compared with 400,000 euros ($468,000) a year earlier.
Both companies said in a news release that the joint venture will continue to work with CMS' Finnish customers in the electronics industry, but Nypro spokesman Al Cotton said Nypro will seek to bring in its own customers.
The purchase helps cement Europe as Nypro's fastest-growing region, he said.
While the U.S.-based molder has seen substantial growth in Asia, Cotton said Europe now is growing at a faster rate, in part because its European operations were smaller than those in other parts of the world and because the firm has added facilities there.
Last year, for example, Nypro built a second facility in Hungary and expanded its Moscow operations. The company also has operations in Wales and Ireland, and two years ago set up a facility in France.
The Finnish expansion is its first in northern Europe, and expands its base to serve global customers, he said.
``There are some customers that we are talking to who have some needs in Scandinavia,'' Cotton said.
The joint venture officially will be owned equally by Nypro and M-Capital Ltd., a Helsinki, Finland-based holding company that owns Ensto. Once the firms complete their agreements, the purchase is subject to regulatory approval.
Besides Ensto, M Capital has investments in real estate and securities, and its subsidiaries have annual sales of about 200 million euros ($234 million) and 1,500 employees.
Nypro operates at 60 sites in 16 countries, with 35 molding plants. It has global sales of $808 million.
CMS also has a mold-making shop that is not part of the joint venture, Cotton said.